The European Union is preparing to terminate the duty-free regime for Ukrainian goods in the coming weeks, the Financial Times has reported, citing sources in diplomatic circles. The temporary regime, which was introduced in 2022 after Russia launched a full-scale invasion of Ukraine, expires on 6 June and it seems that it will not be extended.
The preferential treatment was introduced on an emergency basis and was actually in addition to the already existing EU-Ukraine free trade area agreement. It allowed Ukrainian exporters to supply agricultural products – from grain to poultry meat – to Europe duty-free. The measure was perceived as a politically important gesture of support for Ukraine, which was under military and economic pressure.
But two years later, under the influence of farmers’ protests in a number of EU countries, especially Poland and France, the situation has changed. Warsaw, voicing the interests of local agrarians, initiated the revision of trade terms. The pressure on Brussels was strong enough for the EU to change its policy.
The cancellation of the regime does not mean a complete closure of the EU market for Ukraine. We are talking about a return to quotas, i.e. a strict restriction on the volume of duty-free imports. At the same time, as the FT reports, the European Commission proposes transitional measures: quotas for products will be drastically reduced and distributed by months.
For example:
- The duty-free quota for corn will be reduced from 4.7 million tonnes to 650,000 tonnes per year.
- For poultry meat – from 57.1 thousand tonnes to 40 thousand tonnes.
- For sugar – from 109,000 to 40,700 tonnes.
- A similar reduction is expected in the supply of honey and other agricultural products.
Thus, Ukraine will face not only a reduction in the volume of possible exports, but also a logistical complication: quotas distributed by months significantly limit the flexibility of supplies.
The main argument of disgruntled farmers is the collapse of prices on the domestic market. Agricultural products from Ukraine, produced at lower costs, compete with local products, often displacing them. This is particularly acute in Poland, where the agricultural sector has political influence, and Ukrainian grain exports have travelled through Polish territory.
Despite the rules of the EU common market, the Polish authorities have repeatedly independently imposed bans on Ukrainian imports, formally violating the Union’s regulations. Brussels found itself in a difficult position – between solidarity with Kiev and domestic economic and political interests.
Ukraine has already calculated its potential losses – up to 3.5 billion euros a year. For a country whose economy is at war and acutely dependent on external funding and exports, this is a blow. Nevertheless, European diplomats insist that Ukraine remains a priority partner and that the introduction of transitional measures is a compromise between Kyiv’s political support and the need to take into account the interests of EU citizens.
